The renewable energy sector in India has witnessed a spike in private equity (PE) flows in 2017, despite facing challenges like plunging tariffs and policy modifications.
PE flows into wind and solar power jumped 47 per cent to $920 million — involving nine deals — during January 1-September 25 this year, compared to $630 million across 10 deals during the corresponding period last year, according to Venture Intelligence data. This is the second-best year in terms of PE flows into the sector after 2015, when it attracted $979 million across 14 deals.
Some of the major deals reported in 2017 include Macquarie’s $250-million investment in Hindustan Powerprojects, $200 million by IDFC Alternatives in First Solar, $2500 million by JERA in ReNew Wind Power, $108 million by Warburg Pincus in CleanMax Enviro Energy, and $100 million by Abraaj Group in Engie Abraaj joint venture (JV). A senior representative of a fund, which invests in renewable energy, said investors were attracted by high growth prospects and supportive policy framework. The main challenge, he said, was payment delays by power distribution firms, which were even seeking to renegotiate or cancel projects.